Category: Funds

Fidelity National Financial (FNF), a provider of title insurance, specialty insurance, claims management services and information services, has opened a title insurance operation in Mexico. Juan Pablo Arroyuelo has been appointed VP and general manager of Fidelity National Title de Mexico, while Gerardo Martinez has been named YP and CFO. Luis Unikel, a real estate attorney and former risk manager at GE Real Estate, has been named VP and chief underwriter. “Mexico presents a great opportunity for FNF to expand its direct operations to serve the vibrant Mexican market,” says FNF president Raymond R. Quirk.

Colombia’s Grupo Nacional de Chocolates had privately placed $40m equivalent in PES-denominated notes with Peruvian institutional investors, says a buysider who participated in the transaction. The bullet bonds have a 10-year maturity, and were placed by Citi in the first week of July. According to one investor’s estimates, the bonds pay roughly 8%-9%.The strategy involves issuing so-called Inca bonds to tap funds at a comparably lower interest rate than what can be achieved at home or in the international markets, even after the swap back to pesos.

Equity investors continued to yank cash out of EM and LatAm, with the latter seeing a departure of $564m, or 1.13% of assets under management in the week ended July 9, according to EPFR Global. Brazil funds saw outflows of $119.5m in the same period. For both groups, last week was the third in a row with consistent outflows of over 1%, says EPFR’s Brad Durham. Foreign investors also pulled out BRL1.139bn out of the Bovespa, according to Itau, which quotes the exchange’s information. “Greater risk aversion and deteriorated inflation indices have poisoned global stock markets. Also, the pessimism is quite challenging for Bovespa’s investors. The short-term outlook seems uncertain and lacks [an] upward trigger,” say Itau analysts. Mexico funds lost $82.6m in the same period.

While financing for the $1.4bn gas pipeline project between Peru’s Camisea and the south is still in early stages, Conduit Capital, which is heading the leading consortium via its Kuntur vehicle, says lender interest is already strong. Multilaterals, commercial banks, investment banks and credit agencies have expressed a desire to participate in the deal that is likely to involve the sovereign. Local investment funds and other equity investors are also seen as part of the potential group of financiers, says Conduit partner Samuel Gomez. Much like the Peru LNG project, which involved two multilaterals, a large syndicate of lenders and several equity investors, this project could develop a high profile once underway. “Financing would probably involve bank financing at first then bonds in the future,” says Gomez, noting a structure similar to the CRPAO used in the IRSA toll roads, wherein the sovereign guarantees payments made to local investors holding bonds issued by a trust for the project.

Conduit Capital Partners, the New York based infrastructure-oriented fund, is putting together a consortium of seasoned players to finance, build and operate a 1,000km Peruvian gas pipeline from Camisea field to the southern city of Ilo. The total cost of the project is $1.4bn, and Conduit, through its Peruvian gas vehicle Kuntur, is in pole position to take the job thanks to its early entry into the process and a law backing a key component of its proposal, say Conduit officials. Texas-based Energy Transfer, a builder of pipelines in the US, recently requested a concession for the same deal, and is technically competing with Conduit for the job, though talks may be held to have it give up its unilateral bid and join the Conduit group. Conduit has called upon Odebrecht to participate as a developer, and Colombia’s Promigas, owned by Ashmore, to come in as an operator. Both might contribute equity to the project, which could account for 30%-50% of the $1.4bn, Samuel Gomez, a partner at Conduit, tells LatinFinance. Its scale and its importance to Peru’s national infrastructure grid will place this project front and center in Peru infrastructure discussions in the coming months, and is expected to draw a multitude of institutions interested in deploying equity and debt capital. “We have more than 10 years experience in Peru on energy projects and have been present in projects throughout Latin America,” claims Gomez, adding his shop has roughly $400m to invest in the project.

Peru’s AFPs, or private pension funds, are taking a close look at private equity (PE) and other alternative asset classes to gain exposure to real estate and infrastructure, say local buysiders. The AFPs manage some $25bn in pensions and are seeking to diversify. PE is still in its early stages in Peru, but opportunities have grown significantly in the past year and a half, Alejandro Perez-Reyes, CIO at Prima AFP, tells LatinFinance. As more emerge, he finds his shop must take a longer strategic view on which type of assets to invest in. “We are taking a step back and seeing how we want our portfolio to end up,” says the official, declining to speculate on what the ideal mix might be. He says AFPs like the PE’s long term investment horizons and their involvement in real estate and infrastructure. “Exposure to infrastructure has been limited — not because we don’t want to invest, but [because] there haven’t been the right vehicles,” Eduardo Herrera, CIO at ProFuturo AFP tells LatinFinance. Diversification is the top priority as the funds’ assets continue to grow, Herrera says. This includes looking at new debt and equity issuers in the local markets, as well as spurring regulation that allows APFs to use hedging instruments such as options and CDS.

Peru’s AFPs, or private pension funds, are taking a close look at private equity (PE) and other alternative asset classes to gain exposure to real estate and infrastructure, say local buysiders. The AFPs manage some $25bn in pensions and are seeking to diversify. PE is still in its early stages in Peru, but opportunities have grown significantly in the past year and a half, Alejandro Perez-Reyes, CIO at Prima AFP, tells LatinFinance. As more emerge, he finds his shop must take a longer strategic view on which type of assets to invest in. “We are taking a step back and seeing how we want our portfolio to end up,” says the official, declining to speculate on what the ideal mix might be. He says AFPs like the PE’s long term investment horizons and their involvement in real estate and infrastructure. “Exposure to infrastructure has been limited — not because we don’t want to invest, but [because] there haven’t been the right vehicles,” Eduardo Herrera, CIO at ProFuturo AFP tells LatinFinance. Diversification is the top priority as the funds’ assets continue to grow, Herrera says. This includes looking at new debt and equity issuers in the local markets, as well as spurring regulation that allows APFs to use hedging instruments such as options and CDS.

LatAm equity funds lost $358.4m, or 0.66% of their assets under management, in the week ended June 25, according to EPFR Global. That is the biggest weekly outflow since the week ended January 23, says EPFR’s Brad Durham, noting sentiment for EM equities has been negative overall. Brazil outflows accounted for a significant portion of the capital flight from the region, seeing a departure of $119.5m, or 0.7% of AUM. Mexico funds, largely made up of the iShares index, lost $82.6m, or 5.3% of AUM. LatAm equity funds lost 2.73% in the week ending June 26, according to Lipper. EM funds dropped 3.67%, while China region funds sank 4.56% in a week where almost all funds reported losses. Dedicated short bias funds saw the biggest increase of the week, gaining 6.25%, while diversified leverage funds sank a whopping 8.72%, Lipper data shows.

Despite a pickup in redemptions in the past weeks from equity funds tracked by EPFR Global, LatAm and EMEA are holding up relatively well when compared to other regions. In the first half of the year, LatAm is in the black, with $1.00bn in inflows, compared to $4.93bn in the first half of 2007. With the exception of EMEA, which has had $2.91bn in inflows so far this year, every other region and fund group has seen outflows with the US and Western Europe seeing redemptions of $58.07bn and $40.92bn respectively. EM outflows total $12.30bn, dragged down by $6.39bn in outflows for GEM and $9.83bn departed from non-Japan Asia, says EPFR Global.

Power producer Intergen is acquiring the Libramiento natural gas compression facility from Conduit Capital for $88m. Libramiento is adjacent to the Compresion Bajio project in northern Mexico, as well as an associated 65km natural gas pipeline. Intergen plans to fund the transaction with a combination of equity and limited-recourse debt. The compression facility has a 20-year contract with Pemex.